The URL of this blog comes from a no longer published newspaper from my old home town in Massachusetts. "The Evening Chronicle" was owned and published by an old family friend and long time leader of the Republican Party from the Roosevelt Administration through the Eisenhower Administration, Joseph W. Martin Jr. I hope you all enjoy what you find here.

Wednesday, May 16, 2012

While the French voters decided to swap a closet socialist for a hypocritical hard core socialist, not a whole lot of mention was given on this side of the pond on what an absolute disaster the Greek elections were that were held the same day. The results produced such a fractured Parliament that no coalition government can be formed and there will have to be another round of elections. Meanwhile it was announced yesterday that Greece would indeed be making a €345 billion payment on previous bonds that they thought they were going to skate out of with the last refinancing and 70% haircut deal. The pressure applied to force Greece to make these payments must have been tremendous, as had they not done so there would have been no way to prevent the triggering of the related CDS. Where exactly Greece came up with all that money has yet to be revealed. Small wonder that bank runs started in earnest yesterday, with Greek citizens withdrawing upwards of €900 million in a single day.

For right now the Troika of the EC, ECB and the IMF are perfectly happy for there to be no seated government in Athens, It allows them to keep looting Greece’s physical assets at rock bottom prices. But what happens when a government is seated? After a year or so of ignoring the possibility, the reality is beginning to sink in even with the American press that Greece my default on its debt. As of yet little or nothing can be found in so-called mainstream sources about what the options are or the real implications.
Does Greece seek a “organized” default, leaving the Euro and returning to the Drachma, coupled with some sort of a new debt reorganization, thus attempting to avoid a “credit event,” i.e. pump even more money into an already failed system?

Do they simply unilaterally leave the Euro, default and hope that after a couple of years of pain and chaos that growth will return and Europe will return to doing business with them in the financial markets?

Do they go the Icelandic route, default on the debt, and throw the crooked bankers and politicians that got them into the mess in jail?

There can be no doubt that right now the Troika would prefer some sort of orderly withdrawal and re-accommodation on the Greek debt. But even this is fraught with uncertainty as there would be nothing to prevent Portugal, Ireland, Spain and Italy then standing up and demanding the same accommodations. Problem is that there’s not enough cash in any of the various facilities set up by the EC and the ECB to do it, not even close. And after this weeks local elections in Germany where Chancellor Merkel’s CDU party got stomped, it’s pretty clear that the German electorate is not going to put up with their savings being used to bailout the profligacy of the PIIGS any more. End Game in this scenario? CDS get triggered, European and some U.S banks collapse, then the European Central Banks and the US Federal Reserve have no choice but to print up the losses. Commodity prices begin to soar, then retail prices, and then bank runs that will make Greece’s €900 million run look like a child’s game.

Second scenario, Greece simply walks away, tells the Troika to pound sand and they will revert to the Drachma and deal with the pain for a couple of year before growth can begin again. End Game for this scenario? Same as above, only worse, as the failure of the CDS could trigger the collapse of a large portion of the rest of the $1 Quadrillion of worthless derivatives.

Third scenario, same as above plus they throw he crooked bankers and politicians in jail. This would perhaps be the most interesting, as the EC would have little choice but put even more crushing economic sanctions in place and perhaps even threaten military action. This of course is the banking elites ultimate answer to any financial crises of their own making, war. But it also would expose the dirty little realty that their concern all along has not been to rescue Greece but to protect the banks. Question would then be where would the EC get the authority never mind the troops to pull this off? The UK? Not likely, its military is but a shadow of it former self. France? The French don’t want to work never mind go to war. Germany? The last thing they would do is put themselves in the position of being seen as starting a third European war. As the only remaining highly productive economy in Europe they would ditch the Euro themselves, take their losses, and wish the rest of Europe good luck. They have already begun setting up their own capital reserves for just such an event.

In short the end game for the Euro experiment draws neigh. The bankers and politicians my have a few more accounting tricks and delaying tactics up their sleeves but even that well is beginning to run dry. Anybody who tells you that the US or the rest of the can escape this disaster with “minimal” damage is either lying through their teeth or has not the first idea o what they are talking about.

Tuesday, May 1, 2012

One has to wonder just who is in charge over at the Obama campaign, particularly as to the selection of slogans. Given the media’s and the public’s inclination towards reducing phraseology to acronyms and that “Win The Future” is hardly the first phrase that comes to mind when one sees WTF, forgive me if I might question the intellectual depth that allowed this little gem to get off the drawing board never mind put into play.
Once WTF started to show up on campaign sites and on backdrops for Obama’s speeches it took about two seconds for the Republican opposition to jump all over it referencing of course the more familiar meaning of WTF. Well it was out there and the campaign had to live with it, at least for a while.

So now here we are a month or so on and the best they can come up with for a replacement is “Forward”? Once again one might question the intellectual capacity that brought this one to the fore. That the term as a political slogan has a long history of usage by European socialist and communist parties is beyond dispute. I’m not one to often site Wikipedia as a source but even that on line encyclopedia has an article on its use by Marx, Lenin and Trotsky. That’s not to say that this is its only application but one would think it would have at least given them some cause to pause before using it. http://en.wikipedia.org/wiki/Forward_(generic_name_of_socialist_publications)
So what’s going on here? Is this but a confirmation of Peggy Noonan’s recent conclusion that what we are seeing is amateur hour at the White House? Are they really this clueless? Is perhaps their slogan guru such a hard core socialist/communist that they just can’t help but revert to their indoctrinated form? If David Axelrod and the President are approving this stuff are they clueless or similarly indoctrinated? Or maybe there is a saboteur in the campaign who is simply playing them for fools. If that is the case they sure are earning their salary.
Either way not satisfied to have tossed the Republicans the WTF bone to chew on, somebody decided to wrap it with a nice thick slab of “Forward” bacon. Hilarity will no doubt ensue.